Overview

The SAT20 Asset Circulation Protocol is a protocol that outlines how Satoshis (sats) can enter the BTC native Layer 2 network, how they can be traded and transferred within the Layer 2 network, and how they can be securely returned to the Layer 1 mainnet.

The SAT20 Asset Circulation Protocol is just a protocol and not a Layer 2 network itself. Currently, there is no existing Layer 2 network supported natively by BTC in the market. The BTC ecosystem needs a native Layer 2 network that allows BTC to freely circulate onto the Layer 2 network.

What is a BTC native Layer 2 network? We believe there is only one standard: complete user control. Users must have full control over the security of their assets without needing anyone's permission. They should be able to enter and exit the Layer 2 network at any time without compromising the security of their assets. The SAT20 Asset Circulation Protocol is designed to be compatible with all BTC native Layer 2 networks, whether existing or yet to emerge.

The core concepts of the SAT20 Asset Circulation Protocol include:

1. Sat Locking and Unlocking: Using Lightning Network channel technology, sats are locked on the mainnet. The battle-tested Lightning Network channel technology ensures the security of user assets.

2. Sat Transcending: Sats can transcend between Layer 1 and Layer 2, entirely controlled by the user.

3. Sat Swapping: Sats within the Layer 2 network gain remarkable liquidity through sat swapping.

4. RSMC: The core technology of the Lightning Network, ensuring that users have control over the assets in the channel.

5. Dynamic channel capacity adjustment technology: adjust the capacity of the lightning channel through Splicing technology.

6. Support mainstream asset issuance protocols on the mainnet: Ordinals, ORDX, Runes, BRC20, etc.